Question 1

A machine with a useful life of 10 years and a residual value of $4,000 was purchased for $30,000.What is annual depreciation under the straight-line method?

Accepted Answer

A) $3,000 
B) $3,400 
C) $2,600 
D) $5,200 
A) $3,000 
B) $3,400 
C) $2,600 
D) $5,200

Question 2

The double-declining-balance method of depreciation is referred to as an accelerated method.

Accepted Answer

A) True 
 B)False

Question 3

The process of transferring the cost of metal ores and other minerals removed from the earth to an expense account is called

Accepted Answer

A) depletion. 
B) deferral. 
C) amortization. 
D) depreciation. 
A) depletion. 
B) deferral. 
C) amortization. 
D) depreciation.

Question 4

A gain is recorded on the sale of fixed assets when

Accepted Answer

A) the asset is sold for a price less than its book value. 
B) the asset's book value is less than the cash received. 
C) accumulated depreciation is less than the cash received. 
D) None of the above. 
A) the asset is sold for a price less than its book value. 
B) the asset's book value is less than the cash received. 
C) accumulated depreciation is less than the cash received. 
D) None of the above.

Question 5

Fixed assets are ordinarily presented in the balance sheet

Accepted Answer

A) at current market values. 
B) at replacement costs. 
C) at cost less accumulated depreciation. 
D) in a separate section along with intangible assets. 
A) at current market values. 
B) at replacement costs. 
C) at cost less accumulated depreciation. 
D) in a separate section along with intangible assets.

Question 6

The Drilling Company purchased a mining site for $500,000 on July 1,2010.The company expects to mine ore for the next 10 years and anticipates that a total of 100,000 tons will be recovered.The estimated residual value of the property is $80,000.During 2010 the company extracted 6,500 tons of ore.The depletion expense for 2010 is

Accepted Answer

A) $37,700. 
B) $42,000. 
C) $32,500. 
D) $27,300. 
A) $37,700. 
B) $42,000. 
C) $32,500. 
D) $27,300.

Question 7

If an asset is discarded,a loss is recognized equal to the salvage value.

Accepted Answer

A) True 
 B)False

Question 8

Goodwill is

Accepted Answer

A) amortized similar to other intangibles. 
B) only written down if an impairment in value occurs. 
C) charged to expense immediately. 
D) amortized over 40 years or its economic life,whichever is shorter. 
A) amortized similar to other intangibles. 
B) only written down if an impairment in value occurs. 
C) charged to expense immediately. 
D) amortized over 40 years or its economic life,whichever is shorter.

Question 9

Computer equipment was acquired at the beginning of the year at a cost of $56,000 with an estimated residual value of $5,000 and an estimated useful life of 5 years.Determine the second year's depreciation using straight-line depreciation.

Accepted Answer

A) $10,200 
B) $22,400 
C) $11,200 
D) $12,200 
A) $10,200 
B) $22,400 
C) $11,200 
D) $12,200

Question 10

Identify each of the following expenditures as chargeable to (a)Land, (b)Land Improvements, (c)Buildings, (d)Machinery and Equipment,or (e)other account.

Accepted Answer

The answer of Identify each of the following expenditures as...

Question 11

During 2009,Lexie,Inc.acquired Lena,Inc.for $10,000,000.The fair market value of the net assets of Lena,Inc.was $8,500,000 on the date of purchase.During 2012,Lexie,Inc.determined the goodwill resulting from the Lena acquisition was impaired and had a value of $1,000,000.

Accepted Answer

The answer of During 2009,Lexie,Inc.acquired Lena,Inc.for $10,000,000.The fair market value...

Question 12

A machine was purchased for $60,000.It has a useful life of 5 years and a residual value of $6,000.Under the straight-line method,what is annual depreciation expense?

Accepted Answer

A) $13,200 
B) $12,000 
C) $11,000 
D) $10,800 
A) $13,200 
B) $12,000 
C) $11,000 
D) $10,800

Question 13

A current asset account must be increased for revenue expenditures since they only benefit the current period.

Accepted Answer

A) True 
 B)False

Question 14

Goodwill equals the purchase price of a company over the fair market value of its net assets.

Accepted Answer

A) True 
 B)False

Question 15

Land improvements include

Accepted Answer

A) fences. 
B) trees and shrubs. 
C) outdoor lighting. 
D) All of the above. 
A) fences. 
B) trees and shrubs. 
C) outdoor lighting. 
D) All of the above.

Question 16

Residual value is ignored under double-declining-balance depreciation except for the final year.

Accepted Answer

A) True 
 B)False

Question 17

Equipment with a useful life of 5 years and a residual value of $6,000 was purchased on January 3,2006,for $48,500.The machine was sold on January 5,2011,for $13,000.

Accepted Answer

The answer of Equipment with a useful life of 5...

Question 18

The acquisition costs of property,plant,and equipment should include all normal,reasonable,and necessary costs to get the asset in place and ready for use.

Accepted Answer

A) True 
 B)False

Question 19

What is the cost of the land,based on the following data?

Accepted Answer

The answer of What is the cost of the land,based...

Question 20

If a fixed asset with an original cost of $18,000 and accumulated depreciation of $2,000 is sold for $15,000,the company must

Accepted Answer

A) recognize a loss on the income statement under other expenses. 
B) recognize a loss on the income statement under operating expenses. 
C) recognize a gain on the income statement under other revenues. 
D) Gains and losses are not to be recognized upon the sell of fixed assets. 
A) recognize a loss on the income statement under other expenses. 
B) recognize a loss on the income statement under operating expenses. 
C) recognize a gain on the income statement under other revenues. 
D) Gains and losses are not to be recognized upon the sell of fixed assets.

A machine with a useful life of 10 years and a residual value of $4,000 was purchased for $30,000.What is annual depreciation under the straight-line method?

The double-declining-balance method of depreciation is referred to as an accelerated method.

The process of transferring the cost of metal ores and other minerals removed from the earth to an expense account is called

A gain is recorded on the sale of fixed assets when

Fixed assets are ordinarily presented in the balance sheet

If an asset is discarded,a loss is recognized equal to the salvage value.

Goodwill is

Computer equipment was acquired at the beginning of the year at a cost of $56,000 with an estimated residual value of $5,000 and an estimated useful life of 5 years.Determine the second year's depreciation using straight-line depreciation.

Identify each of the following expenditures as chargeable to (a)Land, (b)Land Improvements, (c)Buildings, (d)Machinery and Equipment,or (e)other account.

During 2009,Lexie,Inc.acquired Lena,Inc.for $10,000,000.The fair market value of the net assets of Lena,Inc.was $8,500,000 on the date of purchase.During 2012,Lexie,Inc.determined the goodwill resulting from the Lena acquisition was impaired and had a value of $1,000,000.

A machine was purchased for $60,000.It has a useful life of 5 years and a residual value of $6,000.Under the straight-line method,what is annual depreciation expense?

A current asset account must be increased for revenue expenditures since they only benefit the current period.

Goodwill equals the purchase price of a company over the fair market value of its net assets.

Land improvements include

Residual value is ignored under double-declining-balance depreciation except for the final year.

Equipment with a useful life of 5 years and a residual value of $6,000 was purchased on January 3,2006,for $48,500.The machine was sold on January 5,2011,for $13,000.

The acquisition costs of property,plant,and equipment should include all normal,reasonable,and necessary costs to get the asset in place and ready for use.

What is the cost of the land,based on the following data?

If a fixed asset with an original cost of $18,000 and accumulated depreciation of $2,000 is sold for $15,000,the company must

The Role of Accounting in Business

Basic Accounting Concepts

Accrual Accounting Concepts

Accounting for Merchandising Businesses

Sarbanes-Oxley,internal Control,and Cash

Receivables and Inventories

Liabilities and Stockholders Equity

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

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Exam 7: Fixed Assets and Intangible Assets

A machine with a useful life of 10 years and a residual value of $4,000 was purchased for $30,000.What is annual depreciation under the straight-line method?

The double-declining-balance method of depreciation is referred to as an accelerated method.

The process of transferring the cost of metal ores and other minerals removed from the earth to an expense account is called

A gain is recorded on the sale of fixed assets when

Fixed assets are ordinarily presented in the balance sheet

If an asset is discarded,a loss is recognized equal to the salvage value.

Goodwill is

Computer equipment was acquired at the beginning of the year at a cost of $56,000 with an estimated residual value of $5,000 and an estimated useful life of 5 years.Determine the second year's depreciation using straight-line depreciation.

Identify each of the following expenditures as chargeable to (a)Land, (b)Land Improvements, (c)Buildings, (d)Machinery and Equipment,or (e)other account.

During 2009,Lexie,Inc.acquired Lena,Inc.for $10,000,000.The fair market value of the net assets of Lena,Inc.was $8,500,000 on the date of purchase.During 2012,Lexie,Inc.determined the goodwill resulting from the Lena acquisition was impaired and had a value of $1,000,000.

A machine was purchased for $60,000.It has a useful life of 5 years and a residual value of $6,000.Under the straight-line method,what is annual depreciation expense?

A current asset account must be increased for revenue expenditures since they only benefit the current period.

Goodwill equals the purchase price of a company over the fair market value of its net assets.

Land improvements include

Residual value is ignored under double-declining-balance depreciation except for the final year.

Equipment with a useful life of 5 years and a residual value of $6,000 was purchased on January 3,2006,for $48,500.The machine was sold on January 5,2011,for $13,000.

The acquisition costs of property,plant,and equipment should include all normal,reasonable,and necessary costs to get the asset in place and ready for use.

What is the cost of the land,based on the following data?

If a fixed asset with an original cost of $18,000 and accumulated depreciation of $2,000 is sold for $15,000,the company must

The Role of Accounting in Business

Basic Accounting Concepts

Accrual Accounting Concepts

Accounting for Merchandising Businesses

Sarbanes-Oxley,internal Control,and Cash

Receivables and Inventories

Liabilities and Stockholders Equity

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

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